II 

118TH CONGRESS 

2D SESSION S. 5120 

To amend the Internal Revenue Code of 1986 to provide tax incentives 

for the establishment of grocery stores in certain underserved areas. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 19, 2024 

Mr. OSSOFF introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

tax incentives for the establishment of grocery stores 

in certain underserved areas. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Fresh Food Act’’. 

5 SEC. 2. TAX INCENTIVES FOR ESTABLISHMENT OF GRO6 CERY STORES IN CERTAIN UNDERSERVED 

7 AREAS. 

8 (a) IN GENERAL.—Chapter 1 of the Internal Rev9 enue Code of 1986 is amended by inserting after sub10 chapter V the following new subchapter: 


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1 ‘‘Subchapter W—Tax Incentives for Grocery 

2 Stores in Underserved Areas 

‘‘Sec. 1400. Increased work opportunity tax credit. 

‘‘Sec. 1400A. Credit for sales of fresh fruits, vegetables, meat, and dairy. 

‘‘Sec. 1400B. Definitions. 

3 ‘‘SEC. 1400. INCREASED WORK OPPORTUNITY TAX CREDIT. 

4 ‘‘(a) IN GENERAL.—In the case of an individual em5 ployed in the trade or business of operating a new under6 served area grocery store (as certified by the designated 

7 local agency (as defined in section 51(d)(12)), the limita8 tion otherwise in effect under section 51(b)(3) with respect 

9 to such individual shall be increased by $1,000. 

10 ‘‘(b) ALTERNATIVE CERTIFICATION.—The Secretary 

11 may provide for alternative methods for certification of an 

12 individual described in subsection (a) in such manner as 

13 the Secretary (in coordination with the head of any rel14 evant Federal agency) determines appropriate. 

15 ‘‘(c) TERMINATION.—Subsection (a) shall only apply 

16 to wages paid in taxable years beginning after December 

17 31, 2024, and before January 1, 2031. 

18 ‘‘SEC. 1400A. CREDIT FOR SALES OF FRESH FRUITS, VEGE19 TABLES, MEAT, AND DAIRY. 

20 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

21 underserved area grocery store fruits, vegetables, meat, 

22 and dairy credit determined under this section for the tax23 able year is an amount equal to the applicable percentage 

24 of the cost of goods sold by the taxpayer with respect to 


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1 the retail sale of fresh fruits, vegetables, meat, and dairy 

2 in the trade or business of operating a new underserved 

3 area grocery store. 

4 ‘‘(b) COST OF GOODS SOLD.—For purposes of sub5 section (a), the cost of goods sold with respect to any tax6 able year is the total amount (as determined under the 

7 method of accounting of the taxpayer) of purchases made 

8 by the taxpayer for goods acquired for resale and sold dur9 ing such taxable year. 

10 ‘‘(c) APPLICABLE PERCENTAGE.— 

11 ‘‘(1) IN GENERAL.—For purposes of subsection 

12 (a), the applicable percentage shall be— 

13 ‘‘(A) in the case of any new underserved 

14 area grocery store which is placed in service 

15 during a taxable year which includes the date 

16 on which the Secretary determines (pursuant to 

17 section 1400B(3)(C)) that the area in which 

18 such grocery store is located qualifies as an un19 derserved area, or which is placed in service 

20 during a taxable year beginning after such 

21 date— 

22 ‘‘(i) with respect to the taxable year in 

23 which such grocery store is placed in serv24 ice, 30 percent, 


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1 ‘‘(ii) with respect to the taxable year 

2 subsequent to the taxable year described in 

3 clause (i), 30 percent, 

4 ‘‘(iii) with respect to the taxable year 

5 subsequent to the taxable year described in 

6 clause (ii), 28 percent, 

7 ‘‘(iv) with respect to the taxable year 

8 subsequent to the taxable year described in 

9 clause (iii), 26 percent, and 

10 ‘‘(v) with respect to any taxable year 

11 subsequent to the taxable year described in 

12 clause (iv), 0 percent, or 

13 ‘‘(B) in the case of any new underserved 

14 area grocery store which was placed in service 

15 during a taxable year which ended prior to the 

16 date on which the Secretary determines (pursu17 ant to section 1400B(3)(C)) that the area in 

18 which such grocery store is located qualifies as 

19 an underserved area— 

20 ‘‘(i) with respect to the taxable year 

21 which includes such date, 30 percent, 

22 ‘‘(ii) with respect to the taxable year 

23 subsequent to the taxable year described in 

24 clause (i), 28 percent, 


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1 ‘‘(iii) with respect to the taxable year 

2 subsequent to the taxable year described in 

3 clause (ii), 26 percent, and 

4 ‘‘(iv) with respect to any taxable year 

5 subsequent to the taxable year described in 

6 clause (iii), 0 percent. 

7 ‘‘(2) BONUS FOR LOCALLY SOURCED FRUITS, 

8 VEGETABLES, MEAT, AND DAIRY.—For purposes of 

9 subsection (a), in the case of any taxable year de10 scribed in paragraph (1) (with the exception of any 

11 taxable year described in subparagraph (A)(v) or 

12 (B)(iv) of such paragraph), the applicable percent13 age for such taxable year shall be increased by 5 

14 percentage points with respect to any fresh fruits, 

15 vegetables, meat, and dairy which are sourced— 

16 ‘‘(A) from any location within the same 

17 State in which the new underserved area gro18 cery store is located, or 

19 ‘‘(B) from any location which is within a 

20 100-mile radius of the new underserved area 

21 grocery store. 

22 ‘‘(d) TERMINATION.—Subsection (a) shall only apply 

23 to taxable years beginning after December 31, 2024, and 

24 before January 1, 2031. 


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1 ‘‘SEC. 1400B. DEFINITIONS. 

2 ‘‘For purposes of this subchapter— 

3 ‘‘(1) FRESH FRUITS, VEGETABLES, MEAT, AND

4 DAIRY.— 

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (B), the term ‘fresh fruits, vegetables, 

7 meat, and dairy’ means any product of agri8 culture (as defined in section 3 of the Fair 

9 Labor Standards Act of 1938 (29 U.S.C. 

10 203(f))) which is suitable for human consump11 tion. 

12 ‘‘(B) EXCLUSION OF CANNED OR FROZEN

13 FOODS.—The term ‘fresh fruits, vegetables, 

14 meat, and dairy’ shall not include any product 

15 described in subparagraph (A) which is canned 

16 or frozen. 

17 ‘‘(2) NEW UNDERSERVED AREA GROCERY

18 STORE.— 

19 ‘‘(A) IN GENERAL.—The term ‘new under20 served area grocery store’ means any building 

21 of the taxpayer if— 

22 ‘‘(i) not more than 80,000 square feet 

23 of such building is used for selling items at 

24 retail, 

25 ‘‘(ii) at least 25 percent of the square 

26 feet of such building which is used for sellVerDate Sep 11 2014 03:00 Sep 28, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S5120.IS S5120

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1 ing items at retail is used for selling fresh 

2 fruits, vegetables, meat, and dairy, 

3 ‘‘(iii) at least 25 percent of the gross 

4 sales of items sold at retail from such 

5 building are attributable to sales of fresh 

6 fruits, vegetables, meat, and dairy, and 

7 ‘‘(iv) such building is located in— 

8 ‘‘(I) an underserved area (as de9 termined by the Secretary under para10 graph (3)(C) after December 31, 

11 2024), or 

12 ‘‘(II) a rural area (as defined in 

13 section 343(a)(13)(A) of the Consoli14 dated Farm and Rural Development 

15 Act (7 U.S.C. 1991(a)(13)(A)). 

16 ‘‘(B) MALLS AND SHOPPING CENTERS.— 

17 ‘‘(i) IN GENERAL.—For purposes of 

18 subparagraph (A), the term ‘building’ in19 cludes any portion of a larger building or 

20 structure (such as a mall or shopping cen21 ter)— 

22 ‘‘(I) which is owned, leased, or 

23 occupied by the taxpayer, and 

24 ‘‘(II) in which the taxpayer, as 

25 part of its trade or business, makes 


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1 retail sales of fresh fruits, vegetables, 

2 meat, and dairy. 

3 ‘‘(ii) APPLICATION OF REQUIRE4 MENTS.—In the case of any portion of a 

5 larger building or structure described in 

6 clause (i), the requirements under clauses 

7 (i) through (iii) of subparagraph (A) shall 

8 be applied solely with respect to such por9 tion and not with respect to the larger 

10 building or structure described in such 

11 clause. 

12 ‘‘(C) DURATION OF STATUS.— 

13 ‘‘(i) UNDERSERVED AREA.—In the 

14 case of any building which is described in 

15 clauses (i) through (iii) of subparagraph 

16 (A) and is in operation during a period in 

17 which the Secretary has determined (pur18 suant to paragraph (3)(C)) that the area 

19 in which such building is located qualifies 

20 as an underserved area, such building shall 

21 not fail to satisfy the requirement de22 scribed in subparagraph (A)(iv)(I) solely 

23 by reason of the area in which such build24 ing is located subsequently ceasing to be 

25 an underserved area. 


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1 ‘‘(ii) RURAL AREA.—In the case of 

2 any building which is described in clauses 

3 (i) through (iii) of subparagraph (A) and is 

4 in operation during a period in which a de5 termination is made after December 31, 

6 2024, that the area in which such building 

7 is located qualifies as a rural area, such 

8 building shall not fail to satisfy the re9 quirement described in subparagraph 

10 (A)(iv)(II) solely by reason of the area in 

11 which such building is located subsequently 

12 ceasing to be a rural area. 

13 ‘‘(3) UNDERSERVED AREA.— 

14 ‘‘(A) IN GENERAL.—The term ‘under15 served area’ means any population census tract 

16 in which— 

17 ‘‘(i) not less than 500 people, or 33 

18 percent of the population of such tract, re19 side— 

20 ‘‘(I) in the case of a tract located 

21 within a metropolitan area, more than 

22 1 mile from a building which satisfies 

23 the requirements in clauses (i) 

24 through (iii) of paragraph (2)(A), or 


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1 ‘‘(II) in the case of a tract not lo2 cated within a metropolitan area, 

3 more than 10 miles from a building 

4 which satisfies the requirements in 

5 clauses (i) through (iii) of paragraph 

6 (2)(A), 

7 ‘‘(ii) the poverty rate for such tract is 

8 at least 20 percent, and 

9 ‘‘(iii)(I) in the case of a tract not lo10 cated within a metropolitan area, the me11 dian family income for such tract does not 

12 exceed 80 percent of statewide median 

13 family income, or 

14 ‘‘(II) in the case of a tract located 

15 within a metropolitan area, the median 

16 family income for such tract does not ex17 ceed 80 percent of the greater of statewide 

18 median family income or the metropolitan 

19 area median family income. 

20 ‘‘(B) AREAS NOT WITHIN CENSUS

21 TRACTS.—In the case of an area which is not 

22 tracted for population census tracts, the equiva23 lent county divisions (as defined by the Bureau 

24 of the Census) shall be used for purposes of deVerDate Sep 11 2014 03:00 Sep 28, 2024 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S5120.IS S5120

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1 terminations of underserved areas under this 

2 paragraph. 

3 ‘‘(C) DETERMINATION OF UNDERSERVED

4 AREA.—For purposes of determining whether a 

5 population census tract qualifies as an under6 served area for purposes of this paragraph, the 

7 Secretary shall make such determinations in co8 ordination with the Secretary of Agriculture in 

9 such manner as is determined appropriate, in10 cluding use of the Food Access Research Atlas 

11 established by the Department of Agriculture. 

12 ‘‘(D) METROPOLITAN AREA.—The term 

13 ‘metropolitan area’ has the same meaning given 

14 the term ‘metropolitan statistical area’ under 

15 section 143(k)(2)(B). 

16 ‘‘(E) REGULATIONS AND GUIDANCE.—Not 

17 later than 6 months after the date of enactment 

18 of the Fresh Food Act, the Secretary shall issue 

19 such regulations or other guidance as may be 

20 necessary or appropriate to carry out the pur21 poses of this paragraph.’’. 

22 (b) CREDIT TO BE PART OF GENERAL BUSINESS

23 CREDIT.— 

24 (1) IN GENERAL.—Section 38(b) of the Internal 

25 Revenue Code of 1986 is amended by striking 


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1 ‘‘plus’’ at the end of paragraph (40), by striking the 

2 period at the end of paragraph (41) and inserting ‘‘, 

3 plus’’, and by adding at the end the following new 

4 paragraph: 

5 ‘‘(42) the underserved area grocery store fruits, 

6 vegetables, meat, and dairy credit determined under 

7 section 1400A.’’. 

8 (2) SPECIFIED CREDITS.—Section 38(c)(4)(B) 

9 of such Code is amended— 

10 (A) in clause (xi), by striking ‘‘and’’ at the 

11 end, 

12 (B) in clause (xii), by striking the period 

13 at the end and inserting ‘‘, and’’, and 

14 (C) by adding at the end the following: 

15 ‘‘(xiii) the credit determined under 

16 section 1400A.’’. 

17 (c) CLERICAL AMENDMENT.—The table of sub18 chapters for chapter 1 of the Internal Revenue Code of 

19 1986 is amended by inserting after the item relating to 

20 subchapter V the following new item: 

‘‘SUBCHAPTER W. TAX INCENTIVES FOR GROCERY STORES IN UNDERSERVED

AREAS’’. 

21 (d) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2024. 

Æ 


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